if you want to know what's going on in the digital world, this is the place to be. we are in austin, texas, at the south by southwest interactive festival. we'll meet the entrepreneurs who are changing the way small business is being done. and we'll tell you why every small business owner needs to be thinking about their mobile strategy. we have that and so much more coming here from austin, coming up next on "your business." small businesses are revitalizing the economy.

and american express open is here to help. that's why we are proud to present "your business" on msnbc. hi, everyone, i'm j.j. ramberg and welcome to a very special edition of "your business." we are here today in austin, texas, at the south by southwest interactive festival, where people from all over the world have descended upon this convention center to talk about the newest and most creative ideas in technology. i went earlier today to the south by west site to see how many panels and discussions are happening about mobile, and there were pages of them. of course. because we are all using our phones and our tablets much more than we used to. so how can you, as a small business owner, decide when it's time to divert some resources to a mobile strategy? i went and interviewed the co-founder of the popular

website rent the runway to ask her how she made the decision. the popular website rent the runway launched its app for iphone in late 2013 the reaction of its customerses was, finally. >> our users were like, thank god! it's been enough time. they were begging us to launch an app for about a year before we actually launched it. >> reporter: co-founder jenn launched the rent the runway on the web in 2009. the idea, help women who want to wear high fashion without the high prices. rent the runway lets its customers rent dresses and accessories from designers ranging from versace to diane von furstenberg for a fraction of what they would cost to buy. the site was an immediate hit. traffic to the site has grown exponentially since the

beginning. and the company has changed significantly, as well. >> the website looks nothing like it looked four years ago. we have a huge technology and product organization now that's constantly tweaking the site in order to optimize conversion and to provide a better, more curetted personalized experience. >> reporter: all the while mobile use was growing, too. by 2012 there were more than 100 million smartphone users. and hundreds of thousands of apps in the iphone app store. and experts were talking about how mobile was the future. but the founders of rent the runway decided to hold off. >> you have to be honest with yourself, as to whether mobile is going to enhance your business. >> reporter: in 2012, they thought it wouldn't. so, what changed their minds? some data they saw. >> we had modeled our traffic every single month and we saw in 2012 mobile visits were about 10% of overall traffic. and in january 2013, we saw they were 25%.

and, every week we would see that number creep up. we really saw that we had to get ahead of this as quickly as possible. >> for rent the runway, creating a mobile strategy was not just about getting new customers, it was about serving the ones they already had. >> our customers on multiple screens throughout the day. she's utilizing rent the runway when she's watching tv, when she's in a boring meeting at work, and we need to be there for her in all channels. >> reporter: but they need to be there in varying ways, depending on the channel. jenn and her team were clear, the mobile experience had to be different than the web experience. before you launched your app, did you do a lot of research with customers? >> we did. we did a huge amount of user testing. we had a lot of research as to why women were already using their mobile phones for rent the runway, and how they were engaging with other e-commerce sites on apps. >> from that research were there features you thought you were going to have on the app that you ended up chucking?

>> well, we were unclear at the beginning of our research whether the app was going to be about transactions, or whether it was going to be about browsing and discovery. and we found out very clearly from that research that the app had to be a place where she could discover these dresses, and browse during her taxi ride, or during her tv binge night. >> so the rent the runway team focused on developing new features that were all about the browsing experience. not the transaction. features that were specific to mobile. >> this feature is you can take a photo of any dress that you see in the store, or actually anything that you see, and we will show you the dress that you can rent. >> so with this feature i can take a picture of anything. i'll take a picture of this green. >> great green notebook. >> and it will show me a dress that matches that green notebook? >> yes. >> wow, how cool. and at the same time they launched their app, they launched a site for the mobile web. >> the website is really offering everything. if you think about our business

like a department store, you know, the website is offering every single feature, every dress, every accessory, whereas mobile gives you a much more limited set of options, as to what you can really engage with and what you can do. >> we kind of ordered the mobile web in a way that is based on our analytics as to what people really want out of their kind of mobile experience. >> dorothy white has been a rent the runway customer since the beginning. renting dresses for weddings and bachelorette parties. and she says she was one of the first to take advantage of the mobile site and download the app. >> normally, i would be looking, you know, on my lunch break or something like that, so i would be on my computer. but then definitely on the go, i use the app. >> while she understands why she made the decision to hold off on launching a mobile experience, jenn admits they should have been earlier to the game 73 and she has this advice for others. >> if you're not in mobile right

now, you are years and years behind. how your actual consumers are using your product. >> in 2005, alexis ohanian launched the company reddit. it's now owned by conde nast and has more than 100 million visitors a month. he then went on to launch the popular travel website and wrote a book called without their permission. we're going to talk about what he learned launching these two successful companies. it's so great to see you. >> thank you. >> hit monk one of my favorite travel sites. >> i take the most credit for the mascot. like every company i start is a new mascot and it warms my heart every time someones says i sometimes watch searches just to watch it dance. >> then you've done your job. you talk in your book and in your speeches a lot about having permission to fail. >> mm-hmm. >> which is -- it's funny to hear that from someone who's been so incredibly successful. >> yeah, i mean you know on the surface, right, it looks like

the way these head lines get written it's a clear story, right? alexis right out of college, a year and a half they're acquired by conde nast. but life in general is full of failures and setbacks. i'm always reminded of the quote from a venture times that sucking is the first step to being sort of good at something. and the fact is we had a company we launched in college that failed miserably which gave us the chance to get to reddit and the reason i wrote the book, the reason i did this insane 77-university bus tour promoting it was because i wanted university students to hear what i wish i had heard which is now is the time to do stuff. to launch stuff, and fail. and not be great at it because that's the way you get better. and because no one is looking right now. but in this country, the doers, the ones who have ideas and do them, have all the power. >> you also talk about ideas here that ideas are kind of a dime a dozen. >> yes, oh, yes. >> it's not the idea that's so important, it's how you implement that idea. >> execution. yeah. you hear far too often, everyone has a great idea. we all do, right? but like i said, you know, the

way i like to think about it, in the industrial revolution, if you wanted to change the world you had to open a factory. in the internet revolution you only need to open a laptop and that's a really big idea. if you have an internet connection, a laptop and time you can create the next reddit, you can start an etsy store and have a start-up. >> can you explain reddit in a couple of sentences? >> yes. >> i explain it as an information community for people who haven't seen it. >> so you know, it's, like i said two guys in an apartment today, it's a top 50 website that is a platform for online communities to share links and have discussions. they submit those links, they vote everything up or down, and it results in hundreds of thousands of front pages. communities who want to follow everything from a particular sports team to a breed of dog like there's a page dedicated to the corgi for fans of that weird and adorable dog and they share photos and discussion and tips with one another.

>> so many people are reading this, talk to me a little bit about product. so you created this product, and it's not fancy, reddit is not fancy at all. >> no. >> but in your speeches you talk about how if you had to parse out your budget you wouldn't spend it so much on markets. you would spend it on product. >> yes. and you can see the lessons, you know, we spent a total in reddit's entire lifetime we spent $500 in advertising. and that was stickers that i covered boston with. the reality is on the web, if you can focus on a great product, your users will do that marketing for you. word of mouth has always been the best way to do it. >> but is there a certain point in your life, though, maybe in the beginning you focus on that but then you get to a certain point and then it's time to spend money on -- >> to be fair, reddit in a lot of ways has this kind of cycle that's doubled every year in travel without any advertising. hit monk, we are doing advertising. depending on the kind of company. i was in travel searches.

i stress to founders start with product. in the short term you can run an amazing ad campaign. you could have celebrities at your launch party but if you haven't made a product people want they're going to be gone in a month. >> all right. well alexis it was so great to meet you. thank you for stopping by. >> thank you for having me. >> once you've launched your app how do you get the word out to your customers? here now are five easy and free ways to promote your app courtesy of entrepreneur.com. one, create a product video. tell your company story in a way people can identify with. two, pitch to review websites. you can generate a lot of buzz by getting mentioned on sites like app advice and app store app. three, apply for awards. winning prizes through the mob ls will get you a ton of press and also provide extra funding for your future project. four create a how-to series.

produce videos potential customers will provide useful. the hash tag how to is one of the top trending tags online. and integ rid social within the app. give users multiple chances to share information about your app with others on facebook, twitter and other sites. we have a lot more to come in our special south by southwest edition of "your business." we'll be talking to anne wojcicki, the founder of the 23andme dna testing company and the company that disrupted the real estate industry. spencer rascoff, ceo of zillow talks about the importance of mobile in a south by southwest learning from the pros. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas

to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. i met steve when i was 19. if there's anything that i would give as advice to people starting a business or young entrepreneur, get a mentor. the value that i've gotten from being associated with steve has been unlike anything that i could have ever gotten from any business school. >> people are lined up around the convention center here to get into the keynote speech of my next guest. anne wong sis kick started her company 23andme in 2006. it provides genetic testing for consumers, and ever since then

it has grown in traction and in some controversy. it's so great to see you, anne. i've been following your company's incredibly interesting, you're a real pioneer in what you're doing. can you explain for people who aren't familiar with 23andme. >> we enable people to get access to their full genetic information. you order online. we send you little tube to spit into. you spit in the tube, mail it back to us, two to eight weeks later we send you an e-mail that says welcome to you. there's all kind of things you can learn about yourself. right now we're only offering the ancestry and raw data so you can learn about where are you from in the world, do you have any relatives on if the 23andme data base that you don't know about and other kinds of fun things. >> and the company started with ancestry and also with health, and there's some controversy with the fda right now, so you're not doing the health part of it. but, it, the idea of your company is much more than just providing the data to consumers. it's really about changing the health care industry. >> yeah. we started the company not with the idea that we want to be a doog gnostic test, but that

first and foremost i want to empower you to own your genetic data because i believe it's a part of you and help you have a you know have better health care or have a better life and that secondly that if i can actually have millions and millions of people all over the world who have their genetic data and give us information about themselves, we can really transform the research process. >> tell me what it is, with so many of the people who watch the show are pioneers in their own ways and it's really hard to explain to a consumer something that they don't already understand. >> yes. >> right. i was telling you, you know what a paper towel does, so how did you message this out in the beginning and find your niche customer who would be the early adopters? >> i think that's been the hardest challenge for us. finding people. people don't know about genetic information. what is the right way to message? part of the beauty of being online, can you do a lot of trial and error. so we can experiment with price, we can experiment with the website. we have education videos out there, we can start to do all kinds of different programs to

help people understand what they can do with this information and we also try to find something in society that people can relate to. so they talk about benadryl where some people take benadryl and they get hyper, some people take benadryl and get sleepy. so it's an example of why some people are different, responding differently to medications, and how can we apply that same concept to everything that we do in life. why are some people responding? why are some people not? >> you take something really simple, that everybody has experienced, and then extrapolate your big company. >> exactly. >> got it. and then how did you know when it was time, because you did a big advertising campaign as well to go from okay we got the early adopters, now we think we have the messaging right, it's ready to go out to the masses? >> for us it was slightly different. we started hiring people or hired our first marketing person when we actually felt like we had won over the scientific community. and we had published extensively, we went through all kinds of debates and we really got the feedback from the

scientific world that they were respecting what we did and we had a good partnership. because for us it's the science, if we don't have that partnership in the scientific world and really have that trust of them we felt like we had no business going big and broad. so when we did that we felt really good about how we were doing in the academic support that we have. >> i want to ask you, you experienced quite a bit of a setback the fda basically said you cannot be giving out this health information. which is a big part of your business. so many small businesses go through these setbacks. so how do you, first how do you as a company deal with this? >> for me it's been -- i mean 23andme has had a number of different setbacks. i think recognizing it's not that i get excited about the setbacks but i recognize any time we get a warning letter, we have some of these issues, you it's somewhat successful in the sense that we're actually really achieving our goal of trying to change the system. and so, in some ways trying to flip it and have a positive thing, okay, the setback actually means -- it's a challenge for us. without a doubt. but we need to recognize, like, we're changing the system, we're

doing something totally new, and we need to embrace working with the regulators and working with the government and figure out like what is the right way to do this. and so -- >> that brings my second question which is a lot of what happens in silicon valley, a lot of what there is ask for forgiveness, not permission and uber is a perfect example of this, right? and you've done it, too, is that the way we should be thinking about our businesses? >> you know, i wouldn't say that in every aspect of life that you want to go forward and just ask for forgiveness. but i think that in one of the great things that silicon valley does is you try a lot of ideas, and ideas die early. and you can integrate and see what works and what doesn't work and so i think that for 23andme when we started we really believed you know we were just an information company you were getting your genome, there's all this data, public data out there about you. it really wasn't a medical device then. and it's really transformed over time. so i think that you launch to say, look, understand even what are people doing with this data. and, and it's obviously evolved.

>> thank you so much. i know there's a big crowd of people wanting to talk to you. we're so happy you stopped to talk to us. >> thank you. spencer rascoff is no stranger to the internet. he cofound the popular travel website hotwire and then turned his attention to real estate with his company zillow. he talks to us about going mobile, seeing the big picture, and being a social ceo on this week's learning from the pros. >> one of the most common mistakes that i used to make was, giving people the benefit of the doubt for a very long period of time. the biggest management mistake is leaving the pitcher in for too long. if you as a manager have in your gut that somebody's probably not going to be right for the job, and is not going to be successful, you know, i try to work with that person and try to help them be successful, but it's very rare that somebody actually comes out of -- out of

an underperforming situation and becomes a very successful person. it's very important to see picture. we had the former president of mexico, vicente fox, he said he it's very important for the bricklayer building the cathedral to understand the bricks he's adding are a foundation for a beautiful cathedral. otherwise the bricklayer becomes bored with his job, thinks he's underpaid, overworked and we try to make sure the employees see the bigger picture, what we're all doing here. mobile is everything at zillow. i wouldn't be sitting here today if it weren't for the advance of the smartphone. two-thirds of our usage is now on a mobile device. 27 different apps across every

major mobile platform so when you're driving around a neighborhood for fun or to do home shopping you can see information on every single home on the block on zillow. that's why we do so well on mobile. it's not just usage. it's also monetization. we make money selling advertising to real estate agents. this migration from desktop to the smrt phoartphone is a huge blessing for us and we've made the most of it. i'm very involved in setting performance goals and i'm constanting pushing people to be more ambitious. how many media stories did we can't we double year? it. how many real estate subscribers last year, this year with k we add 50% more? trying to get people to dream big is an important part of my role. i am what i call a social ceo, which is pretty rare, which means i do spend a lot of time

involved in social media and for me, it's an extension of our brand and our mission as a company, the way run the company and the way we articulate the brand is all about openness and transparency and the reason i engage in social media is because that's where the conversation is happening, that's where people are talking about real estate, that's where people are talking about zillow. it's a direct way for me to interact with customers and users. i view it as it's one part promotional which helps raise awares for zillow, it's one part entertainment and one part market research, a way for me to learn and gather more data to make other decisions more effectively. >> in 2007 i remember my brother telling me to go check out this side called icanhascheeseburger. i remember it because it was a weird name and it was cat pictures. i saw a bunch of adorable cat pictures. ben ha looked at this.

>> i had the same thing you did. i don't understand, what is the cheeseburgers, what's up with the cats. >> me too and 50,000 page views at that time. >> 500,000. >> excuse moe 500,000. you said this is the beginning of what now is the cheeseburger network. >> who are hey i could quit my job and run this thing and it's, may be better than being at my job. we are a collection of humor related websites. we make people laugh for several moments a day. that's our job what, we wake up to do. we run fail block, mean base, know your mean and many others. >> all of this is user generated content. >> we curate around the internet and we're good at finding the thing that is going to make you laugh and smile, humor and happiness. >> people have to spread this, share this with your friends,

you get more advertising dollars, and there are a lot of sites out there that depend on this and they use data, algorithms. what are people clicking on, that's what rises to the top. you decided to still use editors. >> yes. >> why? >> when we first started this we had a lot of investors turned us down, do you mean you're using human beings. machines are just as good as people. something is not something machines yet understand, maybe someday they will. when you are trying to figure out what is going to be the next rebecca black and that song "friday" which turns out we discovered and were the first to publish, machines can't do that. why don't we use human beings for what they're good at, creativity, curation and understanding what's happening in the world today. >> everyone's trying to get that viral thing. how can you figure out this one is going to hit and not going to hit if. >> a lot of it is trial and error. one of the things we encourage our editors to do, make

mistakes. post one thing, if it doesn't work, take it down. because they are really good at trying new ideas they get better about it, they get experience which matters a lot. >> you've built a whole business on curating content, choosing what is best and it goes viral. lot that they'd like to have it as part of their business. >> it's difficult to do. if you think about what people want when they say viral, they want a lot of something for very little effort. isn't that life? it's difficult for people who don't have the means or the experience or the time commitment to make something go viral. when things go viral the nature of virality, they go out of context. it may not help your business when that does occur. >> you get a lot of holiday card it's viral and at the end it's an advertisement and you don't see that advertisement. >> because it's not that part of the business. the virality and nature of the content has nothing to do with

what they do so nobody remembers it. >> yet a lot of people are getting into the content business. do you feel like you need to be in constent in some way, if i sell a product or selling a service, i still, in order to get customers in this day and age, need to connect with them through content? >> i think that's actually a really good approach. it's not about virality, it's about meaningful customer relationships through content. unlike the world of yesterday where people actually met in person and had personal exchanges, every connection that we make through the internet is through a piece of content, so content actually stands in for our relationship by personality, our messages and all that stuff. i want people to think about content, content marketing as a discipline, something that's very, very effective and i think everybody needs to learn it. >> all right, and quickly in our last few seconds you launched a new site. >> our first non-english area called en espaniol, the whous

speak spanish or first or second language. >> now you're going viral in many different languages. ben it was so great to see you. i've been following this company since 2007 so it's a pleasure to get to meet you >> thank you very much. we've gotten the chance to hear from some of the smarptest entrepreneurial minds here at south by southwest. let's get more great ideas from small business owners just like you. >> one of the resources that's been very helpful for me is the u.s. patent trademark office. its eight very helpful in guiding you through step by step to teach you how to patent your product. >> the best way to go out and initially sell your product is to find potential customers and don't sell them, but just ask them what they would like, how much they would pay for the product, what they think of this idea, and if you had this product available today would they buy it and how much would they pay for it. that's been some great advice i have received over the years and that we use in our company.

>> ask for help. lot of people that get into startups believe they know everything there is to know because it was their idea in the beginning. embracing criticism and learning to do that in the beginning of your startup is critical to learning new things, overcoming obstacles you can't do by yourself. >> one of the biggest developments in mobile is the ability to localize your marketing efforts. so if you're trying to reach potential customers in your area, check out our website of the woke. using adago fw o, small businesses with run local news, weather and sports apps. after creating your ad entering a few basic details and contact information, you can decide what region of smartphone users will see the ad. thank you everyone so much for joining us today for this special edition of "your business" at the south by southwest festival. if you missed anything from today, just head on over to our website. it's openforum.com/yourbusiness,

and remember, follow us on twitter, too, it' it's @msnbcyourbiz, and see us on facebook as well. come up next week meet two business owners trying to keep their big brand small. >> we looked at every bottleneck in the process and found a way to eliminate it, it's an effective, well-oiled machine. >> how this very well-known company has been able to remain lean even though it has products on the shelves all over the world. 'til then, i'm j.j. ramburg, and remember, we make "your business" our business. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up.

be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. we come on the air this morning with breaking news from malaysia. the country answer transport minister relays words that the pilot and co-pilot of flight 370 did not ask to fly together on the midnight flight from kuala lumpur to beijing. government officials also said that police are examining an elaborate flight simulator that one of the pilots of the missing airliner had set up in his home. malaysia's transport ministry says the royal malaysia police are also investigating all crew members and passengers as well